Dynamics 365 Licensing for Hybrid Environments
- Dynamics 365 Licensing for Hybrid Environments:
- Cloud and On-Premise: Combine cloud and on-premise capabilities.
- Dual Use Rights: Access both cloud and local installations.
- Subscription Model: Pay for cloud while utilizing on-premise resources.
- Scalable Licensing: Add or adjust licenses as needs change.
- Integration: Seamlessly connect cloud and on-premise Dynamics environments.
Dynamics 365 Licensing for Hybrid Environments
As businesses evolve, many adopt hybrid environments, using a mix of on-premises and cloud-based solutions. Microsoft Dynamics 365 supports this approach, providing the flexibility to run applications on-premises and in the cloud.
Understanding the licensing for these hybrid setups is critical for achieving cost efficiency, ensuring compliance, and optimizing the benefits of both environments.
We explore the essentials of Dynamics 365 licensing for hybrid environments, key considerations, and best practices to ensure your business is leveraging the right combination of licenses.
What are Hybrid Licensing Needs?
Before exploring the specific licensing options available for hybrid environments, it’s important to assess your organization’s needs.
A hybrid environment offers the flexibility of using both on-premises and cloud-based services but also requires careful planning to manage licensing effectively.
- Identify Business Requirements: Determine which parts of your business need to stay on-premises (due to compliance or technical reasons) and which can move to the cloud.
- Assess User Roles: Define roles within your organization to determine whether employees need access to on-premises resources, cloud services, or both.
- Integration Needs: Understand how on-premises systems must integrate with cloud solutions, as this affects licensing requirements.
- Scalability: Hybrid environments often require flexibility to scale up or down. It is essential to select licensing options that support this scalability.
Example: A financial services company may keep its core financial systems on-premises for regulatory compliance while utilizing cloud-based customer service modules to enhance customer experience. Understanding which systems must remain on-premises and which can leverage the cloud will help determine the ideal hybrid licensing model.
Key Licensing Options for Hybrid Scenarios
Microsoft provides various licensing options to support hybrid environments, allowing organizations to choose the most suitable combination of on-premises and cloud capabilities.
- Dual Use Rights: Dynamics 365 licenses provide dual use rights, allowing users to run cloud-based and on-premises versions of Dynamics 365. This is particularly useful for businesses that need the flexibility to transition gradually to the cloud.
- Server and CAL Licensing: Server and Client Access License (CAL) licensing is used for the on-premises components. This requires organizations to purchase server licenses and CALs for each user or device accessing the on-premises system.
- Subscription Licensing: The cloud components are licensed on a subscription basis, typically per-user licenses. These licenses can be used alongside the on-premises components to provide seamless access across environments.
Example: A manufacturing company may use Server and CAL licensing for their on-premises inventory management system while using cloud-based Dynamics 365 Sales with per-user subscription licenses for their sales team, enabling them to access sales data from anywhere.
Read about Dynamics 365 Customer Insights Licensing.
On-Premises vs. Cloud Dynamics 365 Licensing
A hybrid setup inherently involves both on-premises and cloud components, making it essential to understand the differences in licensing these components.
- On-Premises Licensing:
- Requires purchasing server licenses for each instance of Dynamics 365 being run on-premises.
- Users or devices accessing the on-premises servers need Client Access Licenses (CALs).
- CALs can be User CALs (assigned to individuals) or Device CALs (assigned to devices used by multiple users).
- Cloud Licensing:
- Cloud licensing is subscription-based, with pricing typically based on a per-user model.
- Dynamics 365 cloud users have access to automatic updates, which keeps the system current with the latest features and security patches.
- Cloud users may also use hybrid rights to access certain features, providing seamless integration between on-premises and cloud environments.
Example: An organization running Dynamics 365 Finance on-premises may need Server licenses and User CALs for employees accessing the system. Simultaneously, employees using Dynamics 365 Customer Service in the cloud would require per-user subscription licenses.
Using Hybrid Use Benefits for Cost Savings
Microsoft offers Hybrid Use Benefits to help organizations reduce the cost of running workloads in hybrid environments. This allows customers to maximize the value of their existing on-premises licenses when moving workloads to the cloud.
- Azure Hybrid Benefit: This benefit allows customers to use existing Windows Server and SQL Server licenses with Software Assurance to run workloads in Azure at a reduced cost.
- Dual Use Rights: Dynamics 365 dual use rights enable users with a cloud license to access on-premises features without purchasing additional licenses.
- License Mobility: With License Mobility, certain on-premises licenses (such as SQL Server) can be moved to the cloud without requiring new licenses, helping to minimize costs.
Example: A healthcare provider moving their patient management system to Azure could use Azure Hybrid Benefit to reuse their Windows Server licenses with Software Assurance, reducing the overall licensing cost while ensuring they maintain control over sensitive patient data.
Licensing Considerations for Compliance and Security
Managing a hybrid environment requires attention to compliance and security to ensure data integrity and adherence to industry regulations. The following considerations are important for Dynamics 365 licensing in hybrid environments:
- Data Residency: Consider where data is stored. Cloud licensing allows for geographic flexibility, but compliance requirements may dictate keeping certain data on-premises.
- Access Control: Ensure appropriate licenses are assigned to users accessing sensitive data on both on-premises and cloud systems. Conditional Access and Multi-Factor Authentication (MFA) should be used to enhance security.
- Audit and Compliance Tools: The Microsoft Compliance Center and Azure Security Center can track and monitor compliance across the hybrid environment, ensuring that both on-premises and cloud systems meet regulatory standards.
Example: A government agency may need to store sensitive citizen data on-premises for compliance while still using the cloud for less sensitive functions like customer service. In this scenario, ensuring proper licenses are in place for secure access to both environments is crucial.
Real-Life Examples of Hybrid Licensing Scenarios
To understand how Dynamics 365 licensing works in hybrid environments, let’s look at a few real-world scenarios:
- Scenario 1: Retail Chain with On-Premises Inventory and Cloud-Based Sales
- On-Premises: Uses Dynamics 365 Supply Chain Management to manage inventory in local stores.
- Cloud: Uses Dynamics 365 Sales to enable sales staff to access customer information and track sales activities.
- Licensing: Server and CAL licensing for on-premises inventory management; cloud subscription licenses for sales staff.
- Scenario 2: Hybrid Environment for Financial Services
- On-Premises: Maintains core financial data on-premises for compliance.
- Cloud: Uses Dynamics 365 Marketing to run targeted campaigns and track leads.
- Licensing: Dual use rights are leveraged so financial analysts can access both on-premises and cloud data seamlessly.
Tips for Optimizing Dynamics 365 Hybrid Licensing
To make the most of your Dynamics 365 hybrid environment, consider the following best practices for optimizing licensing:
- Leverage Dual Use Rights: Use dual use rights to avoid double licensing costs when running workloads in both on-premises and cloud environments.
- Evaluate User Roles Regularly: Ensure each user has the appropriate license based on their role. Avoid over-licensing by assigning Team Member licenses to users who need limited functionality.
- Use Hybrid Use Benefits: Maximize savings by using Azure Hybrid Benefit and License Mobility for workloads transitioning from on-premises to the cloud.
- Right-Size Server Resources: Regularly review the capacity and utilization of your on-premises and cloud resources to ensure that you are not over-provisioned, which can lead to unnecessary licensing costs.
- Work with a Licensing Expert: Consult with a Microsoft licensing expert to tailor your hybrid licensing strategy to meet your organization’s needs while minimizing costs.
Example: A construction firm might use dual-use rights to run both on-premises project management tools and cloud-based customer relationship management (CRM) tools without needing to pay for redundant licenses, optimizing both cost and operational efficiency.
Dynamics 365 Licensing for Hybrid Environments FAQ
What is a hybrid environment in Dynamics 365?
A hybrid environment includes both on-premise and cloud-based services.
How do I manage licenses across hybrid setups?
Use the Admin Center to monitor and manage licenses for both environments.
Are there specific licenses for hybrid environments?
Yes, Microsoft offers licenses that cover both cloud and on-premise.
How do I ensure compatibility between cloud and on-premise?
Choose licenses that support integration and hybrid solutions.
What happens if I shift from cloud to on-premise?
Your licenses can be adjusted to accommodate infrastructure changes.
Can I migrate on-premise licenses to the cloud?
Yes, Microsoft supports transitioning on-premise licenses to cloud use.
What are the challenges of hybrid licensing?
Hybrid setups may require more complex license management across systems.
Is support available for hybrid environments?
Yes, Microsoft offers support tailored to hybrid deployments.
Can I use the same license for both environments?
Some licenses allow for use across cloud and on-premise systems.
How do I handle updates in hybrid environments?
Ensure licenses cover necessary updates for both systems.
What factors impact costs in hybrid licensing?
Costs depend on the number of users and the environments they access.
How do I avoid license duplication?
Carefully review both on-premise and cloud licenses to prevent overlap.
Are hybrid environments flexible with scaling?
Hybrid licensing allows for scaling across both platforms as needed.
How do I secure licenses in hybrid environments?
Ensure licenses meet the security requirements of both cloud and on-premise.
Can I mix license types in a hybrid environment?
Yes, combining license types is common in hybrid setups for better alignment.
